S.Amdt. 4375

SA 4375. Mr. KOHL (for himself, Mr. Grassley, Ms. Collins, and Mr.
Franken) submitted an amendment intended to be proposed to amendment SA
4369 proposed by Mr. Baucus to the bill H.R. 4213, to amend the
Internal Revenue Code of 1986 to extend certain expiring provisions,
and for other purposes; which was ordered to lie on the table; as
follows:

At the end of the amendment, insert the following:

TITLE ___--PRESERVE ACCESS TO AFFORDABLE GENERICS ACT

SEC. _01. SHORT TITLE.

This title be cited as the ``Preserve Access to Affordable
Generics Act''.

SEC. _02. UNLAWFUL COMPENSATION FOR DELAY.

(a) In General.--The Federal Trade Commission Act (15
U.S.C. 44 et seq.) is amended by--
(1) redesignating section 28 as section 29; and
(2) inserting before section 29, as redesignated, the
following:

``SEC. 28. PRESERVING ACCESS TO AFFORDABLE GENERICS.

``(a) In General.--

[[Page S5042]]

``(1) Enforcement proceeding.--The Federal Trade Commission
may initiate a proceeding to enforce the provisions of this
section against the parties to any agreement resolving or
settling, on a final or interim basis, a patent infringement
claim, in connection with the sale of a drug product.
``(2) Presumption.--
``(A) In general.--Subject to subparagraph (B), in such a
proceeding, an agreement shall be presumed to have
anticompetitive effects and be unlawful if--
``(i) an ANDA filer receives anything of value; and
``(ii) the ANDA filer agrees to limit or forego research,
development, manufacturing, marketing, or sales of the ANDA
product for any period of time.
``(B) Exception.--The presumption in subparagraph (A) shall
not apply if the parties to such agreement demonstrate by
clear and convincing evidence that the procompetitive
benefits of the agreement outweigh the anticompetitive
effects of the agreement.
``(b) Competitive Factors.--In determining whether the
settling parties have met their burden under subsection
(a)(2)(B), the fact finder shall consider--
``(1) the length of time remaining until the end of the
life of the relevant patent, compared with the agreed upon
entry date for the ANDA product;
``(2) the value to consumers of the competition from the
ANDA product allowed under the agreement;
``(3) the form and amount of consideration received by the
ANDA filer in the agreement resolving or settling the patent
infringement claim;
``(4) the revenue the ANDA filer would have received by
winning the patent litigation;
``(5) the reduction in the NDA holder's revenues if it had
lost the patent litigation;
``(6) the time period between the date of the agreement
conveying value to the ANDA filer and the date of the
settlement of the patent infringement claim; and
``(7) any other factor that the fact finder, in its
discretion, deems relevant to its determination of
competitive effects under this subsection.
``(c) Limitations.--In determining whether the settling
parties have met their burden under subsection (a)(2)(B), the
fact finder shall not presume--
``(1) that entry would not have occurred until the
expiration of the relevant patent or statutory exclusivity;
or
``(2) that the agreement's provision for entry of the ANDA
product prior to the expiration of the relevant patent or
statutory exclusivity means that the agreement is pro-
competitive, although such evidence may be relevant to the
fact finder's determination under this section.
``(d) Exclusions.--Nothing in this section shall prohibit a
resolution or settlement of a patent infringement claim in
which the consideration granted by the NDA holder to the ANDA
filer as part of the resolution or settlement includes only
one or more of the following:
``(1) The right to market the ANDA product in the United
States prior to the expiration of--
``(A) any patent that is the basis for the patent
infringement claim; or
``(B) any patent right or other statutory exclusivity that
would prevent the marketing of such drug.
``(2) A payment for reasonable litigation expenses not to
exceed $7,500,000.
``(3) A covenant not to sue on any claim that the ANDA
product infringes a United States patent.
``(e) Regulations and Enforcement.--
``(1) Regulations.--The Federal Trade Commission may issue,
in accordance with section 553 of title 5, United States
Code, regulations implementing and interpreting this section.
These regulations may exempt certain types of agreements
described in subsection (a) if the Commission determines such
agreements will further market competition and benefit
consumers. Judicial review of any such regulation shall be in
the United States District Court for the District of Columbia
pursuant to section 706 of title 5, United States Code.
``(2) Enforcement.--A violation of this section shall be
treated as a violation of section 5.
``(3) Judicial review.--Any person, partnership or
corporation that is subject to a final order of the
Commission, issued in an administrative adjudicative
proceeding under the authority of subsection (a)(1), may,
within 30 days of the issuance of such order, petition for
review of such order in the United States Court of Appeals
for the District of Columbia Circuit or the United States
Court of Appeals for the circuit in which the ultimate parent
entity, as defined at 16 C.F.R. 801.1(a)(3), of the NDA
holder is incorporated as of the date that the NDA is filed
with the Secretary of the Food and Drug Administration, or
the United States Court of Appeals for the circuit in which
the ultimate parent entity of the ANDA filer is incorporated
as of the date that the ANDA is filed with the Secretary of
the Food and Drug Administration. In such a review
proceeding, the findings of the Commission as to the facts,
if supported by evidence, shall be conclusive.
``(f) Antitrust Laws.--Nothing in this section shall be
construed to modify, impair or supersede the applicability of
the antitrust laws as defined in subsection (a) of the 1st
section of the Clayton Act (15 U.S.C. 12(a)) and of section
_05 of this title to the extent that section 5 applies to
unfair methods of competition. Nothing in this section shall
modify, impair, limit or supersede the right of an ANDA filer
to assert claims or counterclaims against any person, under
the antitrust laws or other laws relating to unfair
competition.
``(g) Penalties.--
``(1) Forfeiture.--Each person, partnership or corporation
that violates or assists in the violation of this section
shall forfeit and pay to the United States a civil penalty
sufficient to deter violations of this section, but in no
event greater than 3 times the value received by the party
that is reasonably attributable to a violation of this
section. If no such value has been received by the NDA
holder, the penalty to the NDA holder shall be shall be
sufficient to deter violations, but in no event greater than
3 times the value given to the ANDA filer reasonably
attributable to the violation of this section. Such penalty
shall accrue to the United States and may be recovered in a
civil action brought by the Federal Trade Commission, in its
own name by any of its attorneys designated by it for such
purpose, in a district court of the United States against any
person, partnership or corporation that violates this
section. In such actions, the United States district courts
are empowered to grant mandatory injunctions and such other
and further equitable relief as they deem appropriate.
``(2) Cease and desist.--
``(A) In general.--If the Commission has issued a cease and
desist order with respect to a person, partnership or
corporation in an administrative adjudicative proceeding
under the authority of subsection (a)(1), an action brought
pursuant to paragraph (1) may be commenced against such
person, partnership or corporation at any time before the
expiration of one year after such order becomes final
pursuant to section 5(g).
``(B) Exception.--In an action under subparagraph (A), the
findings of the Commission as to the material facts in the
administrative adjudicative proceeding with respect to such
person's, partnership's or corporation's violation of this
section shall be conclusive unless--
``(i) the terms of such cease and desist order expressly
provide that the Commission's findings shall not be
conclusive; or
``(ii) the order became final by reason of section 5(g)(1),
in which case such finding shall be conclusive if supported
by evidence.
``(3) Civil penalty.--In determining the amount of the
civil penalty described in this section, the court shall take
into account--
``(A) the nature, circumstances, extent, and gravity of the
violation;
``(B) with respect to the violator, the degree of
culpability, any history of violations, the ability to pay,
any effect on the ability to continue doing business, profits
earned by the NDA holder, compensation received by the ANDA
filer, and the amount of commerce affected; and
``(C) other matters that justice requires.
``(4) Remedies in addition.--Remedies provided in this
subsection are in addition to, and not in lieu of, any other
remedy provided by Federal law. Nothing in this paragraph
shall be construed to affect any authority of the Commission
under any other provision of law.
``(h) Definitions.--In this section:
``(1) Agreement.--The term `agreement' means anything that
would constitute an agreement under section 1 of the Sherman
Act (15 U.S.C. 1) or section 5 of this Act.
``(2) Agreement resolving or settling a patent infringement
claim.--The term `agreement resolving or settling a patent
infringement claim' includes any agreement that is entered
into within 30 days of the resolution or the settlement of
the claim, or any other agreement that is contingent upon,
provides a contingent condition for, or is otherwise related
to the resolution or settlement of the claim.
``(3) ANDA.--The term `ANDA' means an abbreviated new drug
application, as defined under section 505(j) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)).
``(4) ANDA filer.--The term `ANDA filer' means a party who
has filed an ANDA with the Food and Drug Administration.
``(5) ANDA product.--The term `ANDA product' means the
product to be manufactured under the ANDA that is the subject
of the patent infringement claim.
``(6) Drug product.--The term `drug product' means a
finished dosage form (e.g., tablet, capsule, or solution)
that contains a drug substance, generally, but not
necessarily, in association with 1 or more other ingredients,
as defined in section 314.3(b) of title 21, Code of Federal
Regulations.
``(7) NDA.--The term `NDA' means a new drug application, as
defined under section 505(b) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(b)).
``(8) NDA holder.--The term `NDA holder' means--
``(A) the party that received FDA approval to market a drug
product pursuant to an NDA;
``(B) a party owning or controlling enforcement of the
patent listed in the Approved Drug Products With Therapeutic
Equivalence Evaluations (commonly known as the `FDA Orange
Book') in connection with the NDA; or
``(C) the predecessors, subsidiaries, divisions, groups,
and affiliates controlled by, controlling, or under common
control with

[[Page S5043]]

any of the entities described in subparagraphs (A) and (B)
(such control to be presumed by direct or indirect share
ownership of 50 percent or greater), as well as the
licensees, licensors, successors, and assigns of each of the
entities.
``(9) Patent infringement.--The term `patent infringement'
means infringement of any patent or of any filed patent
application, extension, reissue, renewal, division,
continuation, continuation in part, reexamination, patent
term restoration, patents of addition and extensions thereof.
``(10) Patent infringement claim.--The term `patent
infringement claim' means any allegation made to an ANDA
filer, whether or not included in a complaint filed with a
court of law, that its ANDA or ANDA product may infringe any
patent held by, or exclusively licensed to, the NDA holder of
the drug product.
``(11) Statutory exclusivity.--The term `statutory
exclusivity' means those prohibitions on the approval of drug
applications under clauses (ii) through (iv) of section
505(c)(3)(E) (5- and 3-year data exclusivity), section 527
(orphan drug exclusivity), or section 505A (pediatric
exclusivity) of the Federal Food, Drug, and Cosmetic Act .''.
(b) Effective Date.--Section 28 of the Federal Trade
Commission Act, as added by this section, shall apply to all
agreements described in section 28(a)(1) of that Act entered
into after November 15, 2009. Section 28(g) of the Federal
Trade Commission Act, as added by this section, shall not
apply to agreements entered into before the date of enactment
of this title.

SEC. _03. NOTICE AND CERTIFICATION OF AGREEMENTS.

(a) Notice of All Agreements.--Section 1112(c)(2) of the
Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 (21 U.S.C. 355 note) is amended by--
(1) striking ``the Commission the'' and inserting the
following: ``the Commission--
``(1) the'';
(2) striking the period and inserting ``; and''; and
(3) inserting at the end the following:
``(2) any other agreement the parties enter into within 30
days of entering into an agreement covered by subsection (a)
or (b).''.
(b) Certification of Agreements.--Section 1112 of such Act
is amended by adding at the end the following:
``(d) Certification.--The Chief Executive Officer or the
company official responsible for negotiating any agreement
required to be filed under subsection (a), (b), or (c) shall
execute and file with the Assistant Attorney General and the
Commission a certification as follows: `I declare that the
following is true, correct, and complete to the best of my
knowledge: The materials filed with the Federal Trade
Commission and the Department of Justice under section 1112
of subtitle B of title XI of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003, with respect to
the agreement referenced in this certification: (1) represent
the complete, final, and exclusive agreement between the
parties; (2) include any ancillary agreements that are
contingent upon, provide a contingent condition for, or are
otherwise related to, the referenced agreement; and (3)
include written descriptions of any oral agreements,
representations, commitments, or promises between the parties
that are responsive to subsection (a) or (b) of such section
1112 and have not been reduced to writing.'.''.

SEC. _04. FORFEITURE OF 180-DAY EXCLUSIVITY PERIOD.

Section 505(j)(5)(D)(i)(V) of the Federal Food, Drug and
Cosmetic Act (21 U.S.C. 355(j)(5)(D)(i)(V)) is amended by
inserting ``section 28 of the Federal Trade Commission Act
or'' after ``that the agreement has violated''.

SEC. _05. COMMISSION LITIGATION AUTHORITY.

Section 16(a)(2) of the Federal Trade Commission Act (15
U.S.C. 56(a)(2)) is amended--
(1) in subparagraph (D), by striking ``or'' after the
semicolon;
(2) in subparagraph (E), by inserting ``or'' after the
semicolon; and
(3) inserting after subparagraph (E) the following:
``(F) under section 28;''.

SEC. _06. STATUTE OF LIMITATIONS.

The Commission shall commence any enforcement proceeding
described in section 28 of the Federal Trade Commission Act,
as added by section 3, except for an action described in
section 28(g)(2) of the Federal Trade Commission Act, not
later than 3 years after the date on which the parties to the
agreement file the Notice of Agreement as provided by
sections 1112(c)(2) and (d) of the Medicare Prescription Drug
Improvement and Modernization Act of 2003 (21 U.S.C. 355
note).

SEC. _07. SEVERABILITY.

If any provision of this title, an amendment made by this
title, or the application of such provision or amendment to
any person or circumstance is held to be unconstitutional,
the remainder of this title, the amendments made by this
title, and the application of the provisions of such title or
amendments to any person or circumstance shall not be
affected thereby.

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